3. When originally issued, an investment in the bonds of Flushing Dough, Inc., promised to provide an annual coupon of 7.00%. The bonds have 4 years until maturity, a market price of $765, and are expected to pay all coupons on time. At maturity, however, the bonds are only forecasted to pay 88% of their par value. What is the likely yield to maturity on the bonds?

2. Last year, a company issued a 20-year annual coupon bond at par value with a yield to maturity of 9.00%. The current yield to maturity has increased to 9.30%. Investors anticipate another increase in yield to maturity over the next 12 months to 9.60%. If the investors forecast accurately, what will be the rate of return on an investment in this bond over the next year?

3. A Japan-based company, Sumo Gyms, Inc., issues a 35-year, semi-annual coupon bond, with a 300 million par value. The coupon rate is given as 6.90%, and the yield to maturity is 8.20.

a. What is the value of the semi-annual coupon on the bond? (Enter your answer in millions and round to two decimal places.)

b. What is the price of the bond?